UK Mortgage Calculator

How UK Mortgages and Stamp Duty Work

A mortgage is a loan secured against a property, typically repaid over 25 to 35 years in the United Kingdom. Most UK buyers need a deposit of at least 5% to 10% of the property price, though a larger deposit often secures a better interest rate. Lenders assess affordability based on income, outgoings, and the loan-to-value (LTV) ratio before offering a mortgage.

Repayment vs Interest-Only

With a repayment mortgage, each monthly payment includes both interest and a portion of the capital, so the loan balance decreases over time and is fully paid off by the end of the term. An interest-only mortgage means you only pay the interest each month, keeping the original loan amount unchanged. At the end of the term, you must repay the full capital, typically by selling the property, using savings, or refinancing. Repayment mortgages are more common because they guarantee the debt is cleared.

Stamp Duty Land Tax (SDLT)

When purchasing property in England or Northern Ireland, buyers must pay Stamp Duty Land Tax. SDLT uses a tiered system: no tax on the first £250,000, then 5% on the portion between £250,001 and £925,000, 10% between £925,001 and £1,500,000, and 12% on anything above £1,500,000. This calculator applies the standard residential rates. First-time buyers and additional properties may have different rates. Scotland and Wales have their own property transaction taxes (LBTT and LTT respectively).

Use this calculator to compare different deposit amounts, terms, and interest rates. Even small rate differences can significantly affect total repayable amounts over a 25-year term, so it pays to shop around for the best mortgage deal.